Monday, September 06, 2010

The End of the Venture Capital Era?

Back in 2006, IPBiz quoted Christopher Sugden of Edison Venture Fund (Lawrenceville, NJ): "patents are not why we are investing."

Flash forward to 2010 and IPFinance has the text:

For some time now, there have been rumblings about the diminishing role of IP (most notably patents) in the Sillicon Valley landscape. Under this view, the Valley is increasingly becoming the bastion of social media and related user apps, and decreasingly a centre for developing "the next big technological thing." The reference to Facebook, LinkedIn and Zynga as the most attractive candidates for an IPO would seem to offer some confirmation of this view. Further, the kind of investment required for cleantech, medical devices and biotech seems to be ill suited for the less form of VC funding that has become the business norm for nearly 20 years.


Alternatively, it might also be the case that the nature of IP services required for certain kinds of high-tech companies, whether start-ups or otherwise, will also need to undergo at least a partial transformation. Under this view, there might be greater reliance on trade secrets and copyright as major sources of legal protection, and less emphasis on traditional patent protection. Afteer all, when one thinks of Apple, one thinks more of the functioning of the Apple ecosystem, which seeks to integrate hardware, software, contents and branding, rather than a dominant patent portfolio.

Patents have NOT been the prime motivator for venture capitalists for some time.

2006 IPBiz post:
"Patents are not why we are investing"

See also:

Grim numbers point to the end of the venture capital era


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